California Just Wrapped Up a Pivotal Legislative Session

By Rowan McGarry-Williams (PO ’21)

Since the 2016 election, California has positioned itself as a site of resistance against the Trump administration. Trump’s recent revocation of California’s authority to set strict auto emissions standards is only the latest escalation in a lengthy conflict, as state Attorney General Xavier Becerra has filed over 50 lawsuits against the administration. Yet these headline-grabbing disputes overshadow a more consequential development: the productivity and progressivism of California’s recent legislative session. The state legislature passed bills tackling subjects as diverse as labor law, charter schools, housing affordability, environmental policy, and even college sports. For California’s nearly 40 million residents, these developments will have enormous consequences. Here are some of the most significant bills the legislature passed. Note that of the bills listed, only AB 5, SB 167, SB 307, and SB 320 have been signed by Governor Gavin Newsom, though he will likely approve the rest before the October 13th deadline.

Assembly Bill (AB) 5:The Gig Economy

Increasing numbers of Californians now find work in the gig economy, characterized by flexible, short-term contracts. Many of these workers are classified as “independent contractors” rather than employees. This is the case for the hundreds of thousands of California drivers that work for ride-share apps like Uber and Lyft. AB 5 codifies the decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles. The law specifies that in order to classify someone as an independent contractor, the hirer must demonstrate that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation, or business.

These criteria, also known as the “ABC test,” intend to bring greater protections to Uber and Lyft drivers. Reclassifying their workers as employees would oblige the companies to pay payroll taxes and Social Security and provide health, disability, and unemployment insurance. Notably, the law exempts a long list of professions from the ABC test, including licensed insurance agents, commercial fishermen, construction subcontractors, and some health care professionals. 

Uber and Lyft lobbied hard against the bill and have promised to continue their opposition. They claim first and foremost that AB 5 will undermine the flexibility of driving for a ride-share platform. Yet the law makes no mention of flexibility or hours as a factor in worker classification; employers and employees thus maintain the ability to determine their own arrangement. Aaron Gordon argues in Jalopnik that AB 5 merely brings Uber and Lyft in line with standard labor law rather than effectively subsidizing them by allowing continued worker misclassification. It may be true that this reform will force gig economy companies to raise prices on consumers. The state legislature, however, has decided that this is a reasonable risk given that “the misclassification of workers as independent contractors has been a significant factor in the erosion of the middle class and the rise in income inequality.

Going forward, the new law will continue to face opposition. Uber, Lyft, and DoorDash have committed $90 million towards creating a ballot initiative to exempt them from its mandate. Simultaneously, Uber is arguing that it is already exempt from AB 5 because the company’s product is its “technology platform,” not the ride-share service itself. The implementation of the law will depend on future court cases and initiatives.

AB 1505 and AB 967: Charter Schools

Increasing accountability and oversight in the charter school sector was a priority for the legislature this session. AB 1505 raises the bar that charter schools must clear in order to be authorized or renewed by their school district. Districts may now reject charters that are “demonstrably unlikely to serve the interests of the entire community.” Rejection is thus merited when a charter school is shown or projected to have a negative fiscal impact, undermine existing services, or simply duplicate pre-existing programs. The bill also prevents school districts from authorizing charter schools outside of their jurisdiction, a practice that had led to a crisis of oversight in the state. However, charter school advocates succeeded in substantially narrowing the bill from its initial scope. As a result, it preserves the ability of charters to appeal a rejection to the county office and possibly the State Board of Education, which has been friendly to the charter sector.

AB 967 subjects charter schools to the transparency requirements already required for traditional public schools. In 2013, California’s Local Control Funding Formula overhauled its school finance structure. With this reform came increased accountability mandates. Districts must now complete a Local Control and Accountability Plan (LCAP) that lays out an exhaustive list of spending allocations and justifications and is approved by the county and state. LCAPs are also required of charter schools, but the state initially imposed little oversight on the sector. A report in 2018 showed that many charter schools were largely failing to complete detailed LCAPs, engage parents in the LCAP process, and post their LCAPs online. AB 967 increases oversight by requiring charter authorizers and administrators to monitor the LCAP process and implement the law.

AB 1482 and Senate Bill (SB) 329: Housing Affordability

California is currently undergoing one of the worst housing affordability crises in the nation. Though they failed to pass a controversial bill, SB 50, that would have increased housing supply, legislators were attentive to the state’s most pressing issue. AB 1482 seeks to confront rent-gouging and baseless evictions. The bill prohibits landlords from increasing rents by over 5% plus inflation annually, with exemptions for homes built in the last 15 years and most single-family homes. This reform promises much-needed relief for California renters facing the pressures of displacement and spiraling costs. In addition, AB 1482 bans landlords from evicting a tenant without “just cause.” In other words, landlords must prove that they have a reason for eviction—such as non-payment of rent or breach of contract—outside of simply wanting the tenant out. 

A favored mechanism to address housing unaffordability by policymakers on both sides of the aisle is the use of Section 8 Housing Choice Vouchers. These vouchers provide funds to lower-income renters, though they are not an entitlement and the waiting list is thus extremely long. Unlike categories like race, gender, and source of income, renters with vouchers were not previously considered members of a “protected class.” As a result, landlords routinely discriminated against voucher holders, preventing them from using the vouchers for their intended purpose. In Los Angeles, for instance, “nearly half the people trying to use a Section 8 voucher had it expire in 2017 before they could find a place to live.” SB 329 expands the definition of “source of income” to include those with housing subsidies, thereby making it illegal to discriminate against them. As with AB 5, implementation and enforcement will be key to this bill’s success going forward.

Other Highlights: Environmental Policy, Criminal Justice, and College Sports

Fire and water policy have long been priorities in California. In the wake of a series of devastating fires, SB 167 requires electrical companies to continue providing power to low-income and medically vulnerable Californians in areas affected by wildfires. SB 307, meanwhile, appears to be a narrow bill preventing Cadiz Inc. from pumping billions of gallons of groundwater in Southern California. Pomona Professor Char Miller argues that the bill reflects a shift in philosophy away from a constant quest for increased water supply towards more sustainable methods of limiting water demand. Criminal justice was also on the table. Building off of earlier legislation that limited the use of deadly force for policemen, SB 320 requires each law enforcement agency to “maintain… guidelines on the use of force, utilizing de-escalation techniques and other alternatives to force when feasible.” AB 32 bans the state’s Department of Corrections and Rehabilitation from renewing or entering into contracts with private prisons or private immigration detention centers, an important win but one that does little to address the over 100,000 inmates in state-run prisons. Lastly, SB 206 would allow NCAA athletes outside of community colleges to receive compensation from sponsorship deals and commercial endeavors, a controversial policy that contradicts NCAA regulations and may be vetoed by Newsom.

In all, the rash of bills passed by the state legislature’s Democratic majorities reflect a progressive vision of governance at a time when the federal government—and most state governments—are moving in the opposite direction. Of course, California continues to struggle with deep-rooted issues of economic inequality, racial segregation, under-funded public schools, and an affordable housing shortage, as does much of the country. Nonetheless, the recent legislative session indicates an awareness of those problems and a commitment to finding solutions. With the elections of 2020 looming, keep an eye on battles over implementation and further legislative developments in the Golden State.

Update: Since publishing, Governor Newsom has signed SB 206, the college compensation bill, into law. Future court challenges are expected from the NCAA

Leave a Reply